SK Group invests US$1 billion in Vingroup
South Korea’s conglomerate SK Group has agreed to buy a 6.1% stake of Vietnam’s largest privately-run Vingroup for US$1 billion to become the latter’s strategic partner, local media reported.
Following the agreement, SK Group registered to purchase Vingroup’s 154.3 million shares through private placement and others 51.4 million shares from its retail arm VinCommerce.
SK Group would hold a total of 205.7 million shares of Vingroup, equivalent to 6.1% of its charter capital. The transaction is subject to regulatory approval. Credit Suisse acted as the sole advisor to Vingroup.
SK Group in a statement on May 16 said it will actively seek new business opportunities in Vietnam as a strategic investor in conglomerate Vingroup.
In March, Bloomberg reported SK Group, through its investment arm SK South East Asia Investment, decided to invest US$1 billion acquiring shares of Vingroup.
Vingroup previously had announced a plan to issue shares through private placement, aiming to raise at least VND25 trillion (US$1.1 billion).
The group expected to offload 250 million shares or 7.8% of the share amount in circulation to a maximum of five foreign investors, and the price would be not less than VND100,000 (US$4.3) apiece.
Of the total fund raised from the process, around VND10 trillion (US$430.44 million) would be utilized for debt restructuring, VND6 trillion (US$258.26 million) to invest in Vingroup’s subsidiaries, including VinFast, VinTech and Vinsmart, while Vingroup expected to allocate VND9 trillion (US$387.37 million) as short-term loan for business operations of the group and its subsidiaries.
Last September, SK Group invested US$470 million to purchase 110 million treasury shares of Masan Group Corporation, equivalent to a 9.5% stake, thus becoming its largest foreign shareholder.
Vingroup, once a real estate and retail conglomerate, has grown to become Vietnam’s largest listed firm with a market capitalization of more than US$16 billion. The company recently launched its first smartphones and cars, and is looking to foray into artificial intelligence.